Too much focus is being placed on UTEK's inability to compete head to head with the high end steppers for the advanced technology. The inability to perform as well as the 0.25u DUV or 0.35u i-line systems is given a great deal of emphasis. UTEK never "failed" at this endeavor but rather chose not to play in that arena. Their claim to fame is the "cost effective processing" of the non critical layers (~50% of the layers) in a mix and match mode with all the high stepper vendors. Since steppers are one of the most expensive systems you put into a fab and also have one of the highest numbers of tools in any given fab equipment set, this was and is a great market strategy. A mix and match strategy (think of the ASMLF alliance) allowed more market penetration for the high end stepper companies (they have limitations on their manufacturing capacity due to lenses) to a larger customer base and allowed UTEK to fill in these fabs with a cost effective solution. If a simple COO (Cost of Ownership) financial simulation is performed, it will bear this out. Good plan for all.
The problem with this is the overriding ability of engineers to convince their Finance people, that they need all Ferraris to do the job and that mixing in a few Cadillacs won't work. This is poor "stewardship" of the company's money when these alternatives are not thoroughly explored. This comes back to haunt you when the competition in the IC industry heats up and you are looking for was to reduce costs or become more cost effective. Depreciation of expensive equipment cannot to adjusted and is an albatross in both good and bad times. In bad times it is a 10-ton dead bird around your neck. Depreciation on newer fabs is a significant component in wafer cost.
The coomments of mine will demonstrate something else. Everything above focused on the high end stepper market and analyst/market perception of UTEK. Even I focused a great deal of this response to that area. However, non of UTEK's competitors have any significant or worrisome activity in all the other markets UTEK serves. UTEK owns the Thin Film Head business for companies like APM and RDRT. They dominant and almost monopolize this sector since no one can or wants to really with them.
UTEK also concentrates on the scanner replacement business. The majority of ICs silicon produced today can still be processed on one type of UTEK stepper or another. I challenge anyone to look at Dataquest, ICE, or any other provider of industry data and determine what percentage of the wafers to be produced over the next 203 years could be processed with UTEK's existing stepper base. In addition to replacing the old Perkin Elmer scanner systems, UTEK is also capable of replacing some of the first generation 5X steppers that are out there in use. This is an inexpensive way to re-vitalize those aging fabs and allow them to extend their technology by 1-2 generations. This becomes another cost effective solution to IC processing for established companies like MOT. What is even more interesting is that these scanners and older generation 5X steppers are finding their way to developing nations such that these emerging nations can bring up a semiconductor processing capability within their own country. That means UTEK can also, down the road, have yet another market to expand into after it is politically feasible to enter those markets.
UTEK has taken advantage of a new leasing strategy for some of its steppers which should prove to be financially beneficial down the road as the leases expire and they lease them to a second set of customers
down the road or a re-lease or purchase of the equipment occurs.
Finally, the market completely discounts the growing MEMS industry. I would encourage every analyst to investigate the market that exists and will exist for MEMS technology (Roger Grace and Associates). I think they will be surprised as to its rapid growth out of infancy. Right now MEMS deals with accelerometers for car "air bags" as its major form of commercialization. MEMS is going to be a force to be reckoned with in fluid, gas, pressure and chemical sensing along with some interesting medical uses. MEMS will also be used to make subcomponents for some of the newer generations of process equipment for IC fabs. UTEK will and has distinguished itself in this emerging arena. Right now SMSC of NY along with MOT and ADI have MEMS programs underway, with others jumping on the bandwagon. Check out how they are processing their wafers and what the lithographic requirements are.
The above is now and Ultrabeam and P-Gild are the future (along with EUV if they decide to play here). I will not discuss these subjects since they only represent a technology roadmap beyond the next 12 month horizon.
OKAY, I am off the soapbox. But it still irritates me that UTEK is beat up bloody for the high end stepper "failings" and is not credited with the great mix/match strategy or itys dominance in the other markets it chooses to serve.
I agree with your last comments about appropriate timing of the investment in UTEK. Probably one of the reasons I am frozen there is because I might miss the right timing situation.
Andrew Vance |
